Foster vs FedEx Express

This case was filed in Los Angeles County Superior Court in 2002.  The plaintiffs alleged FedEx Express routinely underpaid its couriers, handlers and service agents in California in violation of the states wage and hour law.

FedEx Express used a two-step "punch-in/punch-out" process for its employees. The lawsuit alleged the workers were still under the control of FedEx at all times while on the premises and the work done between the dual punch-in/punch-out procedures was done "off the clock." The lawsuit also alleged that couriers and service agents frequently worked during breaks, lunch breaks and split-shift breaks in violation of California law. The plaintiffs entered into evidence analysis by an expert witness (see that document above) who used FedEx own package tracking data to show the prevalence of stops made during breaks and unpaid breaks during shifts.

After having repeatedly stated the company will defend the charges in its financial filings, FedEx settled the lawsuit for $30 million in February 2006.  The company buried reference to the settlement in its Form 10-Q filing with the Securities and Exchange Commission in March 2006.  Settlement notice letters were sent in May 2006.

FedEx Express decided to pay now instead of losing at trial and possibly paying a lot more later.  The plaintiffs presented analysis that even the FedEx hand-selected declarants "worked an average of 24.37 minutes per day on an unpaid basis."  In the plaintiff's Third Declaration (see Page 2 of that document above), the lawyers argued "Over the period of time involved in this lawsuit and given the number of employees employed by Federal Express during that period, this number of unpaid minutes per day equates to $111,695,825 in illegal savings to Federal Express."  

The settlement in this case does not prevent FedEx Express employees elsewhere in the country from pursuing civil litigation to regain lost wages according to other states' wage and hour laws.